The Irish Agricultural Wholesale Society (IAWS) withdrew from the Setanta Sports consortium bidding for NTL Ireland last night on the eve of the deadline for the submission of final bids.
The society, which owns 17 per cent of food group IAWS, would not comment on the reason for its late withdrawal from the consortium, which also includes an US merchant bank specialising in media,Veronis Suhler Stevenson, and the US insurance firm AIG.
Setanta Sports would not comment on the withdrawal of the IAWS co-op or whether it would submit a final bid by 1pm today, the deadline set by NTL's corporate advisers, Goldman Sachs.
The European cable giant UnitedGlobalCom (UGC) and a consortium led by the veteran cable entrepreneur, John Riordan, will also submit bids for the firm, which has 347,000 customers in Dublin, Galway and Waterford.
UGC, which owns Chorus - the second biggest cable television company in the Republic, is considered the favourite to win the auction for NTL Ireland. Analysts said last night that it could benefit from cost efficiencies through merging the companies.
However, a rival bid led by Mr Riordan and backed by the US venture capital firm Doughty Hanson is likely to be a strong competitor in what promises to be one of the biggest Irish deals of the year. Mr Riordan was chairman and chief executive of Princes Holdings, which later became Chorus, and rose to become head of UPC, one of the biggest cable firms in Europe in September 2001.
Cable analysts estimated last night that the sale of NTL Ireland would raise at least €280 million and possibly as much as €300 million through the auction process.
NTL Ireland's latest results show that it generated revenue of €27 million in the fourth quarter of 2004, up 3.2 per cent on the previous year. The firm also added 4, 100 new cable television customers in the quarter and is making broadband more widely available to its customers.
In a preliminary round of bidding organised by Goldman Sachs, the Setanta Sports consortium is understood to have submitted the highest bid for NTL Ireland.
But the complex nature of its consortium, which was only joined by Veronis Suhler Stevenson and Davy Private Clients in recent weeks, according to reports, may undermine its chances of making a strong bid.
Since last year, the IAWS Society has had a stated strategy of making "strategic investments" designed to enhance shareholder value. In February, it raised its stake in National Toll Roads to 26 per cent.
The outcome of the auction is expected to be known within two weeks.
